Solution:
Date Account Title Debit Credit
Dec. 31 Supplies Expense 1200 n/a
Supplies n/a 1200
Date Account Title Debit Credit
Dec. 31 Depreciation Expenses 300 n/a
Accumulated Depreciation-Equipment n/a 300
We will address a particular type of accrued expenditures before we move forward. Farm investments are real long-term investments used in the manufacturing and selling of goods and services. Over more than one accounting year, plant investments are required to deliver profits. Site properties include furniture, equipment, vehicles and fittings, among others. All plant properties wear out or lose utility, with a limited exception for land. Originally, the expenditure of these properties was deferred but must be recorded in compliance with a similar standard as costs on the income statement over the productive lives of product.
The corresponding costs would be reported with an adaptable entry similar to the one with two significant distinctions for certain prepayment expenses. Depreciation implies the value over the life expectancy of these properties. The cost of using plant resources is commonly regarded as the depreciation expense (instead of construction spending or infrastructure expense). Secondly, it is necessary to readily access the original expense of these properties from the company documents. Thought of the Equipment page split into two in the chief. Acquisitions are registered in the Equipment account as debits. Credits for the use of these properties are reported in a second instance. The second is a counter record. A contra account is also the opposite usual balance and is related to a separate account. In this case, it is called Cumulative Depreciation Machinery. Contra account.
Let's now look at an adaptation that has an effect on these accounts. Imagine that at the beginning of December the business bought $26,000 in equipment for profit. The cost of this system must be reduced. The equipment will last five years (profit period) and at the end of the five years, it is estimated to cost about $8,000.00. In other words, at the end of its usable life it would have a surplus value of $8,000.
That means that during its lifespan the total cost of this equipment was 18,000 dollars (26,000 dollars-8,000 dollars). Specific strategies should be used to determine total cost of this $18,000.
